THE EFFECT OF CORPORATE social RESPONSIBILITY ON COMPANY PERFORMANCE
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Historically, corporations' primary “duty” in the corporate sector has been to maximize profits and boost shareholder value. In other universes, corporate financial responsibility has been the only factor influencing the bottom line. A movement defining larger corporate obligations for the environment, for local communities, for working conditions, and for ethical practices has gained speed and traction during the past decade. This new impetus is called CORPORATE SOCIAL RESPONSIBILITY (CSR).
It is frequently referred to as the “triple bottom line” of an organization, which is the sum of its financial, social, and environmental success in conducting business.
As the private sector increases its investments in corporate social responsibility in its three usual ventures (the workplace, the market, and the community), USAID has the unique opportunity to create corporate partnerships that can help expand, enhance, and sustain its health efforts in developing nations.
In recent years, businesses have been able to adapt to a changing global environment not only economically, but also morally and ethically. A company's objective is based on a development strategy that not only benefits its owners, but also responds to all stakeholders involved in the production process, whether directly or indirectly.
A company is an open system that, in order to achieve its primary objective, must be able to unite two broad categories of interest. Profitability and the interests of its stakeholders. Given that a system of exchange and mutual influences is built between stakeholders and the firm, management must be able to analyze the aims, resources, and strategies of common stakeholder groups that must be considered, as well as its own capacity to mobilize other stakeholders.
Given their preeminence over other stakeholders, consumers have assumed a central role, which has prompted businesses to adhere to ethical standards. This is evidenced by the increasing number of businesses that have decided to take “socially responsible” action (see Masimo and Podd; 2008;Podd; and vegalli; 2008)
This is when the notion of corporate social responsibility (CSR) began to enter the popular lexicon and was extensively utilized by academics and economists to ensure the viability of economic progress. As is typically the case when new phrases are developed, they tend to lose their intellectual precision, leaving only their evocative value, which is diluted by the numerous distinct meanings and contexts in which they are employed.
Indeed, the notion of corporate social responsibility (CSR) has taken on several connotations depending on the organization or group employing it. Some individuals tend to highlight particular characteristics that they deem to be more essential than others, such as ethnicity, the environment, safety education, or human rights.
As a result of cultural and historical disparities between nations, definitions change frequently. Occasionally, the idea of corporate social responsibility reflects the level of economic and, consequently, social development of a country, since specific definitions underpinning a certain topic are more pertinent in a particular state.
The world business council for sustainable development (WBCSD) has provided the following meanings due to the varying importance accorded to the phrase by different countries.
“Corporate Social Responsibility is the obligation of a firm to contribute to sustainable economic development by collaborating with workers, their families, local communities, and society as a whole to enhance quality of life.”
Lewis (2002) defines corporate Social Responsibility as the connection between a company and its social surroundings.
CSR is also defined as a method of considering, managing, and balancing the economic, social, and environmental implications of a company's activities (PJC 2006). Corporate Social Responsibility as an integral element of a company's basic business operations, as opposed to a distinct “add on,” distinguishes it from corporate philanthropy, which may be funded by activities that are detrimental to the communities in which the firm or corporation operates. In recent years, the extent to which corporation directors and management should consider social and environmental concerns when making decisions, as opposed to focusing just on maximizing short-term accounting profits, has been the topic of much debate.
1.2 DESCRIPTION OF THE PROBLEM
Corporate Social Responsibility (CSR) is the topic of significant debate and criticism over its implementation. Proponents of Corporate Social Responsibility (CSR) claim that there is a strong commercial case for CSR because corporations benefit in various ways by functioning with a broader and longer-term perspective than their own immediate short-term profit.
Critics believe that Corporate Social Responsibility (CSR) detracts from the essential economic role of a business, but others argue that it is nothing more than cosmetic widow dressing and an attempt to usurp the government's role as a watchdog over strong multinational corporations.
It should not be the responsibility of the government to achieve sustainable development in order to improve the quality of life in society as a whole. However, this concept is not yet entirely accepted in Nigeria, and some businesses view Social Responsibility as an unneeded burden. They believe that the prevailing economic burden under the name of social responsibility is unjust to their company.
Some businesses are completely unaware of social responsibilities. They believe that as long as they operate within the parameters of their legal position and meet all of their legal requirements, they are in good standing.
Social responsibility is such an imprecise idea that it may be difficult to establish what social obligation a firm should undertake. Numerous businesses argue that employing and training employees to improve performance, contributing to the public coffers by paying taxes, boosting the country's Gross Domestic Product (GDP) by being productive, and maintaining cordial relationships with its close stakeholders, suppliers, consumers, and employees are sufficient social responsibilities.
1.3 OBJECTIVES OF THE STUDY
The purpose of this study is to examine the effect of corporate social responsibility on business performance, focusing on the Ijebu Ode Branch of First Bank Nigeria PLC.
The particular goals are as follows:
1. Determine the constraints that fiscal policies such as taxes and other fees impose on social responsibility.
2. Determine an organization's proper level of social responsibility
3. Establishing a connection between profitability and social responsibility in the banking industry
Determine the amount of awareness of socially responsible accounting and the degree to which businesses are responsive to their immediate surroundings.
1.4 RADIUS OF THE STUDY
With the expansion of banking activities, new sectors have been added to the transitory list of services provided by banks, resulting in an expansion of their operations and the introduction of new laws and regulations.
The purpose of this study is to increase the impact of Corporate Social Responsibility (CSR) on the performance of Nigerian banks, particularly the Ijebu Ode branch of First Bank of Nigeria PLC.
1.5 research QUESTIONS
The following are the research questions generated by this investigation:
Is there a connection between shareholder wealth maximization and corporate social responsibility?
Is there a connection between corporate social responsibility and customer loyalty?
Government fiscal measures that encourage or discourage corporate responsibility
Would the adoption of legislation, professional standards, and reporting requirements for social responsibility and corporate social responsibility increase the degree and quantity of corporate social responsibility?
1.6 RESEARCH HYPOTHESIS
The research hypothesis is examined in this study.
Ho: (null hypothesis)
Hi: (alternative theory) (alternative hypothesis)
This test will demonstrate the connection between corporate social responsibility and the performance of businesses.
There is no correlation between corporate social responsibility and firm performance.
Hi: There is a substantial correlation between corporate social responsibility and firm performance.
1.7 Importance and Justification of the Research
Corporate Social Responsibility (CSR) has been recognized as a potent strategy for building trust and confidence in an organisation. In this perspective, proper corporate social responsibility is of utmost importance for banks because these organizations deal with public funds.
Findings would serve as a guide for the establishment of statutory legislation and standards to control social responsibility accounting and reporting, as well as for the education of corporate firms in the promotion of corporate rate. Social responsibility (CSR)
In order to demonstrate the commitment of Social responsibility to Profitability, students' knowledge of social responsibility accounting would be incorporated.
1.8 DEFINITION OF TERMS
BUSINESS SOCIAL RESPONSIBILITY (CSR)
Business for Social Responsibility (BSR) defines Corporate Social Responsibility (CSR) as attaining financial success in methods that honor ethical ideals and respect people, communities, and neutral enhancement.
This refers to the efficiency with which an organization or business fulfills its mission for a certain target audience.
Stakeholders are people who are affected by the performance or activities of a company or organization.
This includes examining competitors' corporate social responsibility (CSR) programs as well as measuring and evaluating the impact of these policies on society and the environment, as well as determining how customers perceive competitors' CSR.
THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON COMPANY PERFORMANCE
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